Counterfeit goods: A growing problem in India

Counterfeit goods and pirated software and optical media continue to thrive in India. A report by the United States Trade Representative has named Nehru Place and Palika Bazaar in New Delhi, Richie Street and Burma Bazaar in Chennai, Manish Market, Heera Panna, Lamington Road and Fort District in Mumbai, and Chandni Chowk in Kolkata as markets that need to be watched out for this high-volume trade.

India, in fact, continues to be on the "priority watch list" of the USTR's "Special 301" report, despite a detailed submission of the intellectual property rights compliance measures initiated by it in 2009.

The "Special 301" report is an annual review of the global state of IPR protection and enforcement. Priority watch list is a list of countries whose IPR compliance is not satisfactory from the US point of view.

The report alleged that manufacturing and distribution of pharmaceutical products bearing counterfeit trademarks was a growing problem in India as well as Brazil, China, Indonesia and Russia.

The report, released on April 30, termed last year's progress made by India on IPR enforcement front as "incremental", though it welcomed the country's efforts to amend trademark laws to facilitate its accession to the Madrid Protocol - an international treaty on registration and recognition of trade marks. However, it expressed concerns over "India's inadequate legal framework and ineffective enforcement".

"Piracy and counterfeiting, including counterfeiting of medicines, remains widespread and India's enforcement regime remains ineffective at addressing this problem. Amendments are needed to bring India's copyright law in line with international standards, including by implementing the provisions of the WIPO Internet Treaties.

Additionally, a law designed to address unauthorised manufacturing and distribution of optical discs remains in a draft form and should be enacted in the near term," the report said.

The United States continued to point fingers at India for its patent laws and said a current provision in law (probably Section 3(d) of the Indian Patents Act) appeared to limit the patentability of potentially beneficial innovations such as temperature-stable forms of a drug or new means of drug delivery.

The Section 3(d) of Indian Patent Act prevents patenting of mere incremental innovations.

The report wanted India to "improve its criminal enforcement regime by providing for expeditious judicial disposition of IPR infringement cases as well as deterrent sentences and to change the perception that IPR offenses were low priority crimes".

This is the first time that USTR had given an opportunity to India to provide its views on IPR enforcement before finalising the Special 301 Report.

The Special 301 Report categorises countries under three separate heads - watchlist, priority watchlist and notorious - depending on how USTR rates the IP enforcement systems of its trading partner. India and 10 others - Algeria, Argentina, Canada, Chile, China, Indonesia, Pakistan, Russia, Thailand and Venezuela - are under the priority watch list for 2010.